HEALTH chiefs have refused to rule out ward closures and job cuts at Southampton hospitals after clear-the-air talks with MPs over a £7.5 million overspend yesterday.

Mark Hackett, chief executive of Southampton University Hospitals NHS Trust, said it was "inevitable" sweeping changes would be needed to reduce the shortfall. He convinced city MPs John Denham and Alan Whitehead - who had demanded to know how the hospital had plunged into the red despite receiving record government funding - bad management was not to blame.

But Mr Hackett, who has been in his post just three months, accepted the trust needed to modernise to "make the best use of the extra resources".

He made the comments during face-to-face talks with ex-health minister Mr Denham, Labour backbencher Mr Whitehead and trust chairman Richard Keightley yesterday.

The meeting was described as "full, useful and constructive".

Proposals to claw back cash included:

Working with GPs and social services to enable patients to recuperate in community hospitals in order to free up expensive beds at Southampton General, the Royal South Hants and the Princess Anne hospitals - tackling so-called "bed-blocking"

Investing in intensive care facilities so it can reduce delays in treatment for seriously ill patients;

Dealing more closely with primary care trusts to recoup the money spent on specialist care for patients from outside South Hamphire;

Bringing back into the NHS services that were contracted to private hospitals in a bid to slash waiting times.

In a joint statement, the NHS trust and MPs said: "All parties agreed that the substantial extra money being invested in the NHS by the government has produced considerable benefits including shorter waiting times; greater access to specialists, new drugs and procedures; and modern buildings and equipment."

It added: "The pattern of services developed in past years needs to change to give the people of Southampton a health service fit for the 21st century, and to make the best use of the extra resources now available. Some of the changes needed both in the trust and the wider NHS were overdue and the pace of change needs to accelerate."

Asked whether he believed wards in Southampton were still at risk, Mr Denham said: "If more people are going to be treated in the community, then the pattern of treatment at the hospital will change, maybe for the better."

The trust, which reported debts of £5m last April, pledged to claw back £15m in savings by April 2005.But last month the Echo revealed it had fallen an extra £2.5m into debt - despite making five months worth of cutbacks.

Health chiefs rejected MPs claims that bad management was responsible for the rising debts, insisting the extra £30m received from the government was spent on staff wages, pensions and the cost of drugs and equipment.